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All Forum Posts by: Vincent Russo

Vincent Russo has started 3 posts and replied 9 times.

48 acres not archers! Not going to war :)

My wife and I found 48 archers zoned agricultural in Harford County Maryland. She runs a horse training business but we do not own any of our land. We want to buy this land and use if for this purpose. There are no structures on the property.  What loan options are out there to get us in this property at the lowest amount out of pocket? What tax incentives are there? We own a rental and a primary home. This is our first go at purchasing raw land. 

Thanks!

Quote from @Bonnie Low:

Have you done a mid term rental before? It is a unique niche that has options to serve many types of travelers, not just travel nurses, but it can take time to get established and build your clientele. As such, with interest rates rising and it sounds like you don't have a robust cushion, I'd make sure the property cash flows or meets your necessary criteria as a LTR in case the mid term rental doesn't work out. This will just provide you with a higher degree of confidence that your underwriting is sound in case you need to pivot if you don't get traction with travelers right away. Just a thought.


Thank you Bonnie, good advice. It would be a good LTR for sure. It is walking distance to great bars and restaurants and is also 1 block from the most popular park in the area. Baltimore gets a bad reputation for violence (not totally wrong) however where this property is, is the safest part of the city. It would be an amazing STR if the city allowed it. I have high confidence I will be able to get nurses in here with little downtime. Johns Hopkins is a few blocks away. This will be good for traveling doctors and nurses alike. As well as family members of patients getting long term care there.

Quote from @James Dainard:
Quote from @Vincent Russo:

Hello All,

I have a place I am about to make an offer on in Baltimore, MD. Over the last few months while shopping for a place, I was told I need to put 20% down since this would not be my primary residence. It is too close to my home to call it a vacation home, so I need to do a conventional investment property loan. Now that the rates are up over 7%, my loan guy is telling me I need to put 25% down, says it is a new rule.  My credit score is over 700 and debt to income is solid. Putting 25% is really squeezing my liquid cash to do anything else with the property after I own it. (It will be a MTR for traveling nurses, so I need to furnish it). What options do I not know about that I could be using here that will allow me to put as little as possible down on this property?


 Hey Vincent,

Is there a chance that you can move into the new place on an owner-occupied loan and use your current property as the MTR? That way would get you down to a 3.5-5% down range. Your payment will end up being higher but if you're confident in rents you could make it work.

Best of luck!

Thanks for all the insight everyone! Looks like I can use a HELOC on my primary home to use for some of the down payment which will leave me with some cash. This was all very helpful!
Quote from @Jay Hurst:
Quote from @Vincent Russo:

Hello All,

I have a place I am about to make an offer on in Baltimore, MD. Over the last few months while shopping for a place, I was told I need to put 20% down since this would not be my primary residence. It is too close to my home to call it a vacation home, so I need to do a conventional investment property loan. Now that the rates are up over 7%, my loan guy is telling me I need to put 25% down, says it is a new rule.  My credit score is over 700 and debt to income is solid. Putting 25% is really squeezing my liquid cash to do anything else with the property after I own it. (It will be a MTR for traveling nurses, so I need to furnish it). What options do I not know about that I could be using here that will allow me to put as little as possible down on this property?

 @Vincent Russo   Nothing has changed per Fannie Mae. You can still put 15% down on a non-owner single family. 25% IS required for a 2-4 unit. 


 15% would be amazing. It is a 2 bedroom townhome. What qualifications do I need to hit the 15% mark? That was never discussed. 

Quote from @Nathan Gesner:
Quote from @Vincent Russo:

I'm sorry I don't have any advice on how you can make this happen. I just want to ask: is an emotional decision or a wise business decision? If the market slows down and property values drop 10% in the next year, would you still be happy with the purchase?  If you have to put 25% down and pay 7% interest, does it still cashflow and make sense?

The market is changing. We don't know if prices will stabilize or stagnate or crash. For the first time in six years, I'm not seeing a lot of properties that make sense, but I do see a lot of new investors making emotional decisions, rushing to buy properties at inflated prices. 

Maybe it's right for you. I'm just suggesting you be careful about trying to force a deal.


 Thanks Nathan, I do feel your concerns about the market. Lots of seasoned investors give the same advice, if the numbers work then go for it. Don't try to time the market. I would hold this property for the long term. In the Baltimore area we have world famous hospitals. Travel nurses are a great tenant pool. They pay high rents and are clean, safe people. I should be able to cashflow close to 1K a month even with the terrible interest rates. I just hate the idea of using pretty much all of my cash to get in this deal. I am shopping in the lower end of housing prices for the area so I either have to stomach this or sit out. 

Hello All,

I have a place I am about to make an offer on in Baltimore, MD. Over the last few months while shopping for a place, I was told I need to put 20% down since this would not be my primary residence. It is too close to my home to call it a vacation home, so I need to do a conventional investment property loan. Now that the rates are up over 7%, my loan guy is telling me I need to put 25% down, says it is a new rule.  My credit score is over 700 and debt to income is solid. Putting 25% is really squeezing my liquid cash to do anything else with the property after I own it. (It will be a MTR for traveling nurses, so I need to furnish it). What options do I not know about that I could be using here that will allow me to put as little as possible down on this property?

Thanks Nathan,

My concern is not having the money in the Spring to move on it. It was more a question of is it a smart move to buy now and carry the loan without renters in fear that the market will get wild again with multiple offers? You did offer your opinion to that part so thank you for the advice. As I said in my original post, this is my first go at this. Right now I am only looking at real estate sites like zillow for listings. I know that is a rookie move. I would love to find a foreclosure or something not listed yet that needs work. Any suggestions as to how to find deals not listed yet? Something like that I would jump on and fix it up all winter. Then refi after the reno. 

Thanks!

I have the funds to act now. This would be my first investment property ever. I live 3 hours from Ocean City, Maryland. The hot season is about over. I worry if I buy now, I will need to carry the note until next summer with no renters. This would be a STR opportunity. Nothing available WOWs me but I really don't think the market will all of a sudden crash like some are predicting. I am worried if I don't act now, I will not have much to buy in the late winter early Spring. Thoughts? Should I wait until Winter so I can see if better opportunities pop up or grab something now and pay the mortgage for 9 months?